Illinois Farmers Ins. Co. v. Wiegand

• Decision Date: 17 May 2004
• Docket Number: No. 79A05-0307-CV-349.,79A05-0307-CV-349.
• Citation: 808 N.E.2d 180
• Parties: ILLINOIS FARMERS INSURANCE COMPANY, Appellant-Plaintiff, v. Gerry WIEGAND, Linda Wiegand, Timothy Slaughterbeck and Susan Slaughterbeck, Individually and as Next Friends of Emily Slaughterbeck, Appellees-Defendants.
• Court: Indiana Appellate Court

808 N.E.2d 180

ILLINOIS FARMERS INSURANCE COMPANY, Appellant-Plaintiff, v. Gerry WIEGAND, Linda Wiegand, Timothy Slaughterbeck and Susan Slaughterbeck, Individually and as Next Friends of Emily Slaughterbeck, Appellees-Defendants.

No. 79A05-0307-CV-349.

Court of Appeals of Indiana.

May 17, 2004.

Laura S. Reed, Riley Bennett & Egloff, Indianapolis, IN, Attorney for Appellant.

Michael J. Stapleton, Cheryl M. Knodle, Ball Eggleston Bumbleburg McBride Walkey & Stapleton, Carl J. Sandy, Lafayette, IN, Attorneys for Appellees.

OPINION

SHARPNACK, Judge.

Illinois Farmers Insurance Company ("Insurer") appeals the partial denial of its motion for summary judgment against Gerry Wiegand, Linda Wiegand, Timothy Slaughterbeck and Susan Slaughterbeck, individually and as Next Friends of Emily Slaughterbeck (collectively, the "Defendants"), and the Defendants cross-appeal the grant of partial summary judgment to Insurer. Insurer raises one issue, which we restate as whether the trial court erred by finding that the insurance policy does not exclude coverage for the Slaughterbecks' negligent supervision claim. The Defendants raise one issue, which we restate as whether the trial court erred by finding that the all-terrain vehicle ("ATV") involved in the accident that is the subject of this litigation is a "motor vehicle" as defined by the insurance policy. We affirm in part and reverse in part.

The relevant facts designated by the parties follow. On the night of August 25, 2000, Kayla Wiegand invited her friend Emily Slaughterbeck to her house in West Point, Indiana for a sleepover. Gerry and Linda Wiegand (the "Wiegands") own a Kawasaki four wheel ATV, which they had purchased in 1998 for snow removal and recreational use. Gerry Wiegand knew that Kayla would sometimes take her friends for rides on the ATV, but he did not instruct either Kayla or Emily regarding the proper use of the ATV. The next morning, Kayla drove a friend's ATV and Emily drove the Wiegands' ATV. After Emily and Kayla drove off of the Wiegands' property and onto a country road, Emily struck a tree, and suffered traumatic brain and facial injuries.

On March 27, 2001, Timothy Slaughterbeck and Susan Slaughterbeck (the "Slaughterbecks"), Emily's parents, filed a complaint for damages against the Wiegands, which alleged, in relevant part, that:

The collision and resulting injuries and damages were the direct and proximate result of the negligence and fault of the [Wiegands] in one or more of, but not limited to, the following respects:

a. Entrusting a dangerous instrumentality, e.g., an ATV, to an inexperienced child;

b. Failing to properly instruct Emily in the operation of the ATV;

c. Fail[ing] to supervise Emily in the operation of the ATV;

d. Fail[ing] to warn Emily of the dangers associated with the operation of the ATV;

e. Permitting and encouraging Emily to operate the ATV without any protective clothing or head gear;

f. Failing to inform and obtain the prior approval of Emily's parents prior to Emily operating the ATV.

Appellant's Appendix at 37.

The Wiegands have a homeowner's insurance policy through Insurer (the "Policy"). Insurer filed a complaint for declaratory judgment, alleging that there was no coverage under the Policy for the Slaughterbecks' claim for damages stemming from Emily's ATV accident. On April 2, 2002, Insurer filed a motion for summary judgment, arguing that there was no genuine issue of material fact that the Policy excludes coverage for Emily's injuries because: (1) the ATV is a motor vehicle as defined by the Policy; and (2) Emily's injuries arose out of the ownership, use, and entrustment of the ATV. The Defendants filed a cross-motion for summary judgment, arguing that the Policy did cover Emily's injuries because: (1) the Slaughterbecks' negligent supervision claim is not excluded by the Policy's motor vehicle exclusion; and (2) the ATV is not a motor vehicle.

The Policy provides that: "We do not cover: ... Motor vehicles, including their parts or accessories while in or on any motor vehicle." Id. at 59 (emphasis in original). The Policy also provides that:

We do not cover bodily injury, property damage or personal injury which:

* * * * * * 7. results from the ownership, maintenance, use, loading or unloading of:

* * * * * *

b. motor vehicles

8. results from the entrustment of ... motor vehicles.... Entrustment means the permission you give to any person other than you to use any ... motor vehicles ... owned or controlled by you.

Id. at 64-65 (emphasis in original). Paragraph eleven of the Policy defines motor vehicle as follows:

a. a motorized land vehicle, including a trailer, semi-trailer or motorized bicycle, designed for travel on public roads.

b. Any vehicle while being towed or carried on a vehicle described in 11a.

c. Any other motorized land vehicle designed for recreational use off public roads.

None of the following is a motor vehicle.

a. a motorized golf cart while on the golf course and used for golfing purposes.

b. A motorized land vehicle, not subject to motor vehicle registration, used only on an insured location.

c. Any watercraft or camp, home or utility trailer not being towed or carried on a vehicle described 11a.

Id. at 58 (emphasis in original).

After a hearing, the trial court issued an order granting part of Insurer's motion for summary judgment, which provided as follows:

The Court finds that there is a genuine issue of material fact as to whether the ATV is a motor vehicle and therefore denies summary judgment, without prejudice to renewal of the motion upon designation of additional evidence.... No evidence was designated to the Court as to the purpose for which the ATV in question was designed.

* * * * * *

The Court finds that there is a genuine issue of material fact concerning whether the negligent supervision claim is covered by the policy and therefore denies [Insurer's] motion for summary judgment on that issue.

Id. at 12-15. On October 22, 2002, Insurer filed a motion for partial summary judgment, alleging that the ATV is a motor vehicle pursuant to the Policy. In support of its argument, Insurer designated the affidavit of Seth Bayer, a licensed professional engineer, wherein Bayer concluded that:

* * * * * *

6. The 1997 Kawasaki KVF400A falls into the category of vehicles referenced as all-terrain vehicles or off-road vehicles as the police report indicates.

7. The 1997 Kawasaki KVF400A is typical of the ATV category of vehicle and was designed for off road purposes, including recreational use off public roads.

Id. at 184-185. The Defendants filed a response, reiterating the same arguments they had made in their reply to Insurer's motion for summary judgment. On May 23, 2003, after a hearing, the trial court issued an order granting Insurer's motion for partial summary judgment, finding that the ATV is a motor vehicle under the Policy. Insurer and the Defendants also requested that the trial court clarify whether there was coverage under the policy, as a matter of law, for the Slaughterbecks' negligent supervision claim. With regard to this issue, the trial court's order provided:

By way of clarification, given the designated evidence, there is coverage under the policy for the claim of negligent supervision. As the Court held in its previous summary judgment decision, negligent supervision is a separate tort in the State of Indiana as to which a person may be liable to a minor in his care, even if he would not be liable under theories of premises liability. To the extent that Emily Slaughterbeck's injury resulted from the Wiegands' negligent failure to supervise her, there is coverage.

Id. at 4.

Insurer then filed this appeal, arguing that the trial court erred by finding that the Slaughterbecks' negligent supervision claim is covered under the Policy. The Defendants cross-appealed, arguing that the trial court erred by finding that the ATV is a motor vehicle under the Policy.

On appeal, the standard of review of a grant or denial of a motion for summary judgment is the same as that used in the trial court: summary judgment is appropriate only where the designated evidence shows that there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Corr v. Am. Family Ins., 767 N.E.2d 535, 537-538 (Ind.2002). The moving party must designate sufficient evidence to eliminate any genuine factual issues, and once the moving party has done so, the burden shifts to the nonmoving party to come forth with contrary evidence. Shambaugh & Son, Inc. v. Carlisle, 763 N.E.2d 459, 460-461 (Ind.2002). The court must accept as true those facts alleged by the nonmoving party, construe the evidence in favor of the nonmoving party, and resolve all doubts against the moving party. Id. The fact that the parties have made cross-motions for summary judgment does not alter our standard of review. Metal Working Lubricants Co. v. Indianapolis Water Co., 746 N.E.2d 352, 355 (Ind.Ct.App. 2001).

The issues raised by Insurer and the Defendants require us to analyze the language of the Policy. "The construction of an insurance contract is a question of law for which summary judgment is particularly appropriate." State Farm Mut. Auto. Ins. Co. v. Gonterman, 637 N.E.2d 811, 813 (Ind.Ct.App.1994). When the policy language of an insurance contract is clear and unambiguous, we will give the language its plain and ordinary meaning. Eli Lilly & Co. v. Home Ins. Co., 482 N.E.2d 467, 470 (Ind.1985), cert. denied, 479 U.S. 1060, 107 S.Ct. 940 (1987). An insurance policy is ambiguous if reasonable persons may honestly differ as to the meaning of the policy language. Id. We interpret policy terms from the perspective of an ordinary policyholder of average intelligence. Asbury v. Ind. Union Mut. Ins. Co., 441 N.E.2d 232, 237 (Ind.Ct.App. 1982). Where there is ambiguity, an insurance policy must be strictly construed against the insurer. Am....